Business
First US Bancshares, Inc. Announces Branch Closures at Acceptance Loan Company Subsidiary
BIRMINGHAM, Ala., Sept. 03, 2021 (GLOBE NEWSWIRE) -- First US Bancshares, Inc. (Nasdaq: FUSB) (the “Company”), the parent company of First US Bank (the
About this update from First Us Bancshares, Inc.
[{"type":"text","content":"BIRMINGHAM, Ala., Sept. 03, 2021 (GLOBE NEWSWIRE) -- First US Bancshares, Inc. (Nasdaq: FUSB) (the “Company”), the parent company of First US Bank (the “Bank”), today announced that, effective immediately, the Bank’s wholly owned subsidiary, Acceptance Loan Company, Inc. (“ALC”), will cease new business development and permanently close its 20 branch lending locations in Alabama and Mississippi to the public. ALC will continue to service its remaining portfolio of loans from its headquarters in Mobile, Alabama, and management will begin to prepare for the subsidiary’s eventual closure. The cessation of new business and closure of ALC’s branch locations was approved by the boards of directors of ALC, the Bank and the Company on August 25, 2021. These efforts are being undertaken by the Company as part of a long-term strategy to reduce expenses, fortify asset quality, and focus the Company’s loan growth efforts in other areas, including the Bank’s commercial lending and consumer indirect lending efforts. The closure of ALC’s branches will eliminate 56 full-time employment positions during the third quarter of 2021. The Company currently expects the closure of ALC to occur by the end of 2023. In connection with the ALC branch closures, the Company expects to record pre-tax charges of approximately $1.2 million during the third quarter of 2021. These one-time expenses include severance and related personnel costs, lease termination costs, fixed asset valuation adjustments, termination of technology contracts, and other costs to administrate the branch closures, summarized below. These estimates are preliminary as management is still in the process of evaluating the costs of closing the ALC branches. $ in millionsSeverance and personnel expenses$ 0.4Lease termination costs 0.4Fixed asset valuation adjustments 0.2Termination of technology contracts 0.1Other expenses 0.1 $ 1.2 It is expected that the one-time expenses will be fully offset by the end of 2021 with ongoing cost savings that result from the ALC branch closures, as well as the previously announced closure of four Bank branches that will be completed in the third quarter. Revenue associated with ALC’s portfolio of loans is expected to diminish over time as loans mature and are paid off. The timing of revenue reductions, or the need for additional loan loss provisioning as th...